The Financialisation of Residential Capitalism in Australia

Abstract

This thesis details the history of the financialisation of housing in Australia to denaturalise homeownership and landlordism. It shows how during the post-war boom a property-owning middle class was fostered while the public rental sector was undermined, and private tenancies kept insecure and expensive. This obscured class relations and neutralised their more radical tendencies whilst creating class divides demarcated by real estate ownership. At the same time, tenure-biased housing policy and the construction of a financial system geared toward mortgage credit created conditions that enabled the emergence of a highly leveraged, tax subsidised investor class. House prices rose faster than wages and housing became increasingly unaffordable for those without familial wealth.

During the 1980s, financial liberalisation facilitated a reorientation of this homeownership society toward rents and capital gains through both owner-occupation and landlordism. Social objectives previously pursued through financial regulation were abandoned for a technical neutrality that ostensibly relied exclusively on markets. This neutrality was undermined by the intensification of tenure-biased fiscal policies that tilted investment toward housing. Politics and policymaking became dominated by house prices and interest rates. This is why much that is deemed to be housing policy has very little to do with housing while fiscal, monetary, and financial regulations ostensibly not targeted at housing have the greatest effect on the financing, taxation, and price of real estate.

The balance sheets of mortgaged households and banks thereby became the ‘contact point’ between the state, households, and financial institutions. This rendered financialised housing a dispositif, or device, of neoliberal governmentality that governs the governors themselves by necessitating a perpetual bailout that maintains the upward stability of Australia’s financialised political economy with exclusionary effects.